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Every so often, we hear credit card companies promote their reward system. This is to catch up with the fierce competition among them. Each and every credit card company strives to stay above each other, trying to outdo the promotional gimmicks of their competitors. For whatever it is worth, it is the consumers who benefit from all this competition.

One of the reward systems promoted by credit companies is the cash back credit card. Yes, you read it right – money given back to you for using the credit card. The system works like this – you use your credit cards and you earn bonus points. Bonus points have to reach a certain level determined by the credit company before it can be converted into cash. There are many ways to give back cash to consumers. The most popular way is by getting a check deposited straight to your bank account. Another way is to credit it to your credit card account which will serve as a rebate. This means that your total amount due is reduced by a certain percentage. This percentage reduction may not be that big, but it is better than nothing.

Other means of giving cash back is not always through money. Instead of actual money, cash can take the form of goods such as shoes, dresses, and grocery items. This will all depend on the credit card company. That is why it is really important that you understand the terms and conditions of a cash back credit card scheme that a card company is promoting. Knowing how to use this reward system can mean making it work to your advantage.

Most companies involved in the card industry do not give perks without getting something in return. It is actually a matter of strategy whether a company can lure you to spend more for their benefit. This is the reason why it is important to study every move you make with your credit cards. It is very ironic that consumers have to spend more and charge every purchase into their credit cards just to get the most out of this cash back credit card reward system.

In conclusion, this cash back credit card system does not change anything in your account and is not a reward system after all. It is actually a game of equation where you spend more to get more. It can even increase your dependence on cards making these card companies richer. Thus, beware of gimmicks; it might just complicate your spending.

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